Privileged government workers continue to start their own high-pension schemes to escape the challenges associated with the country’s statutory pension scheme for workers, Nike Popola reports.
Remaining challenges for the Nigerian pension industry include non-payment of honoraria and pensions, non-remittance of workers’ monthly pension deductions, payment of ridiculously low monthly salaries, omission of retiree’s name from payroll, and receipt of benefits. long waiting periods for especially pensions.
Retirees in Nigeria currently receive their pensions from two different pension schemes: the defined benefit pension scheme and the contributory pension scheme.
Known as the old pension system, marred by payment discrepancies, the DBS has caused great hardship for Nigerian retirees for decades.
Despite annual budget allocations from the federal government, deep-seated challenges under the DBS remain unresolved under the CPS.
The DBS and CPS issues continue to motivate elected officials to circumvent the schemes and create their own specially favored pension schemes.
DBS
DBS is administered by the Office of Pension Transition Arrangements. Pensions from the Public Employee Pension Bureau, Police Pension Bureau, Customs, Immigration and Prison Pension Bureau are supported.
Speaking on the challenges of DBS, Federal Concern Pensioner Vice President Akiniere Ordim is concerned that several promises from the federal government have not been met.
“The reconciliation payments have been delayed for far too long,” he said.
“Some of our members are still not on the payroll since they retired more than 15 years ago. Many are in bed, some have passed away.
“Pensioners are suffering deeply under the current administration. Our problem must be investigated as soon as possible.”
“Many of our members are bedridden with all kinds of ailments. Some of them have lost their eyesight. We are owed up to 10 years in arrears.”
He also said it was important for the government to provide retirees with health insurance and other social benefits.
CPS
CPS is regulated by the National Pension Board. The law was enacted by the Pension Reform Act of 2004, but the government’s level of compliance was flawed.
For example, in 2014 the PRA increased monthly pension contributions from 15 percent to 18 percent of workers’ compensation.
Years later, the federal government continued to send only 15% of remittances, but only a year ago was it ready to comply with the 18% law.
Retirees under the CPS also have to endure long waits of several years before they can start receiving their pensions. This is because the federal government has not shown full commitment to funding the accruals that need to be added to increase workers’ RSA before their monthly pension starts.
Nigerian Labor Conference Chair Joe Ajaello noted that the CPS has done very well in some areas.
He expressed concern that some retirees are receiving disastrously low salaries.
“There are pensioners of 5,000 naira a month,” Ajaello said. and is not sustainable.”
According to Pencom’s report on “lump sum payments” as of December 2022, the commission has allowed 145,313 retirees to withdraw from the CPS for receiving less than NGN 550,000. Their meager savings were returned and their monthly pensions were not paid.
Anxiety
Dr. Pius Apelle, Chairman and Chief Executive Officer of Achor Actual Services Limited, said the expected growth in penetration in the pension sector will depend on strong economic growth and job creation.
“However, the eight-year tenure of Maj. Gen. Muhammadu Buhari (president) has led to the closure of several businesses, resulting in job losses and slowing the spread of pensions in the country,” he said.
He noted that Parliament recently passed the 2014 PRA Amendment Act, which excludes parliamentary staff from the CPS and establishes the “Parliamentary Service Pension Committee”.
“This is a violation and a ridicule of the legislative process, as the bill was silently passed without public hearings and without acknowledging the contributions of stakeholders,” he said.
“By passing this law, Congress has opened the door for other governmental and quasi-state agencies to begin agitating for their own immunity without having the moral justification to deny the agitator. It will happen.”
On the CPS’s performance, he said there was significant growth in pension entitlements, up from 6.8 million in 2015 to 9.9 million by the end of February 2023.
He said assets under management increased from 5.3 trillion naira in 2015 to 15.4 trillion naira at the end of February 2023.
Apere also praised Buhari’s introduction of micropension plans in Nigeria in 2019, aimed at providing pension security to people in the informal sector of the economy.
Theme
Ivor Thakor, director of the Center for Pension Advocacy, said the PTAD-supervised DBS draws pensions from the state coffers at the federal level and that pension payments have stabilized somewhat under the outgoing government.
However, he added that there are still some challenges, such as delinquency in pension payments, payment of death benefits, and delinquencies associated with pension reviews.
“The biggest challenge has been the release of funds to pay retirees’ arrears,” he said. It keeps me going.”
He said a major challenge facing pensioners withdrawing after the Buhari government took over was the issue of minimum security pensions to ensure adequate benefits for retirees.
He said, “Section 84(1) provides for a minimum guaranteed pension, which should be specified by Pencom from time to time.” Pencom has not yet identified MGP. ”
Another area where the outgoing federal government failed, he said, is overhauling pensions under the CPS.
On government defaults, he said, “Article 173(3) of the 1999 Constitution (as amended) provides that the pensions of federal civil servants shall be reviewed every five years or together with a review of salaries, whichever is earlier. stipulates,” he said. Article 210, Section 3 of the Constitution has a similar provision for state civil servants. ”
PTAD
Despite the challenges that DBS still faces, PTAD Executive Director Dr. Kioma Ejikeme said DBS has made great strides in the system.
Addressing pensioners at the Northeast Stakeholder Engagement Forum in Yola, Adamawa state in April, she said: “With the unwavering support of President Muhammadu Buhari, the PTAD has fully liquidated the unfunded debts inherited by all citizens.” Handed over to PTAD in 2017, we are fully committed to liquidation. ”
Retirees acknowledge that there has been regularity in their monthly pension payments, but argue that other major challenges have yet to be addressed.
“The federal government pays pensions regularly every month, but there are still many outstanding arrears,” said Arashi Lawal, chairman of the NUP (Lagos Federal Branch).
“Some of the retirees have not been paid since they left in 2007, despite checking with the PTAD.”
Pencom
At the start of CPS, Pencom said the pension industry had a debt of ¥2.2 trillion.
It is said that it is raising funds to eliminate a huge amount of delinquency. But industry insiders say they don’t have enough money to end the long backlog of orders.
In January 2023, Pencom revealed that the federal government had waived a Norwegian 13.89 billion norm for accrued rights payments to CPS retirees retiring in 2022.
It states: “The accrued pension rights represent the employee’s benefits for the past years of service up to June 2004, when the CPS came into effect.”
In its 2021 report on the pension industry, National Pensions Commission Secretary General Aisha Dahir Umar said the federal government has given retirees from Treasury-funded ministries, departments and institutions a total It revealed that it paid 980.18 billion naira. Contributory pension plan from 2004 to December 2021.
The most important development in the pension industry for 2021, she said, is the successful reduction of the federal government’s unpaid pension liabilities under the CPS.
She said Pencom has received presidential approval of NOK 159.46 billion to pay part of the federal government’s outstanding pension obligations under the CPS.
As a result, Naira 40.55 billion, the accrued rights of 6,282 retirees and 2,329 deceased employees, were paid out in the same year, she said.
He said 85,743 retirees and 693,229 active employees had N66.83 billion in retirement savings accounts, a shortfall of 2.5% of the employer pension contribution rate as of December 2021. added that it is.
jumbo pension
Eight years of Buhari’s government come to an end today (Monday), and retirees do not understand why their agenda remains ‘carried over’.
Experts accuse elected officials of failing to introduce comfortable pensions for their elected workers and instead of adopting selfish and bloated pensions.
In 2019, the Socio-Economic Rights and Accountability Project “failed to recover more than 40 billion Naira of double wages and life pensions to the federal government and Federal Attorney General and Minister of Justice Abubakar Malami (SAN). filed an insult lawsuit against,” said former governors who are now lawmakers and ministers. ”
Judge Oguntoyimbo of the Federal High Court of Lagos instructed Marami to “challenge the legality of the state’s lifetime pension laws allowing former governors and other former public officials to collect pensions.”
Unfortunately, the Buhari government failed to implement the ruling.
Pencom’s State and FCT Implementation of Pension Plans as of September 2022 Report Finds Only 7 States Paying Workers’ Pensions Under the CPS Amid Huge Unpaid Amounts
low rank
According to the Allianz Global Pensions Report 2023, Nigeria’s pension system is at the bottom of the global rankings and needs reform.
It reads, “Nigeria’s pension system is at the bottom of the world rankings. It is only a small consolation that most other African countries have roughly similar scores. Pension systems remain a reason for concern.” the low coverage of
